Financial Enforcement Actions | Week of February 29 to March 06

Enforcement Report Feb 29 - Mar 06

Enforcement Report Feb 29 - Mar 06..

FinCEN

1 Enforcement Document

$0.00 in Fines

Penalties: N/A
Respondent: Michael LaFontaine
Violation: "Mr. LaFontaine was advised by two different AMLOs that they believed the existing SearchSpace system, as used by the Bank, was inadequate, because caps were set to limit the number of alerts. The OCC warned U.S. Bank on several occasions that using numerical caps to limit the Bank’s monitoring programs based on the size of its staff and available resources could result in a potential enforcement action and FinCEN had taken previous public actions against banks for the same activity... Read More

FINRA

10 Enforcement Documents

$235,000.00 in Fines

Penalties: $5,000.00
Respondent: Benjamin Kaz Fujihara
Violation: Between February 2017 and July 2018, Fujihara purchased and resold a small number of firearms through his outside business without performing any woodworking or other gunsmithing services on the firearms before selling them. In so doing, Fujihara engaged in outside business activities without providing full and accurate prior written notice to Morgan Stanley of such activities. By virtue of the foregoing, Fujihara violated FINRA Rules 3270 and 2010... Read More

Penalties: $5,000.00
Respondent: John Stuart Crain
Violation: Upon receipt of the customer-signed documents, Crain altered them by filling in the missing information on each document. All of the information that Crain added to the documents was accurate. Crain then submitted these documents as originals to the Firm in order to effect transactions, all of which were requested by the customers. By virtue of the foregoing, Crain altered documents, in violation of FINRA Rule 2010... Read More

Penalties: N/A
Respondent: Raymond A. Thomas
Violation: Prior to engaging in outside business activities on behalf of Waverly Capital outside the scope of his relationship with Network 1, Thomas failed to disclose in writing or otherwise to anyone at Network 1 his outside business activities involving Waverly Capital. In contravention of the Firm's WSPs, Thomas did not get approval from the Firm to engage in any of the outside business activities alleged herein. By reason of the foregoing, Thomas violated FINRA Rules 3270 and 2010... Read More

Penalties: $5,000.00
Respondent: Chad P. Meyer
Violation: Because Meyer failed to provide Allstate with prior written notice of this outside business activity for which he received compensation, Meyer violated FINRA Rules 3270 and 2010... Read More

Penalties: $5,000.00
Respondent: Billy Hai Zhang
Violation: In November 2016, Zhang received a written communication from one of his customers of the Firm, in which the customer complained about the use of proceeds from the partial redemption of a variable life insurance product. The proceeds, in the amount of $10,600, were used to reinstate a separate policy that had lapsed due to the non-payment of premiums. Three months later, on February 23, 2017, Zhang paid $10,600 to settle the customer's complaint. Zhang failed to notify the Firm about the complaint or obtain its consent or approval before making the payment. By virtue of the foregoing, Respondent violated FINRA Rule 2010... Read More

Penalties: N/A
Respondent: Andre Pierre Davis
Violation: "By refusing to produce the information or documents as requested pursuant to FINRA Rule 8210, Respondent has violated FINRA Rules 8210 and 2010"... Read More

Penalties: $10,000.00
Respondent: Steven S. Maher
Violation: "By obtaining customer signatures on partially-blank VADFs and utilizing a photocopy of the signed signature pages to compete the additional VADFs that were required to obtain his member firm's approval of the recommended transactions, Maher violated FINRA Rule 2010... Read More

Penalties: N/A
Respondent: Louis Cook
Violation: Between August and December 2016, Cook made written misrepresentations to at least 11 customers 1) that the Third Party Authorization Form was necessary to allow Cook to continue to service the variable annuity; 2) that the authorization was triggered by the Department of Labor's "Fiduciary Rule;" and 3) that taking no action may limit the customers' choices going forward. By virtue of the foregoing, Cook violated FINRA Rule 2010... Read More

Penalties: $5,000.00
Respondent: Imran N. Razvi
Violation: Razvi violated FINRA Rules 3270 and 2010... Read More

Penalties: $200,000.00
Respondent: Erik Patrick Pica
Violation: Respondent Converted Funds, in Violation of FINRA Rules 2150 and 2010 (First Cause of Action)... Read More

UK-ICO

3 Enforcement Documents

£500,000.00 in Fines

Penalties: N/A
Respondent: CRDNN Limited
Violation: Contraventions to regulation 19 and regulation 24 of the Privacy and Electronic Comunication (EC Directive) Regulations 2003 ("PECR")... Read More

Penalties: £500,000.00
Respondent: Cathay Pacific Airways Limited
Violation: The Commissioner finds that Cathay Pacific controverted DPP7, due to a number of deficiencies in its data security... Read More

SEC

19 Enforcement Documents

$6,321,756.64 in Fines

Penalties: N/A
Respondent: Bongiorno, Arthur
Violation: The SEC's complaint, filed in the U.S. District Court for the Northern District of Ohio, charges Arthur and Bongiorno with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and the brokerdealer registration provisions of Section 15(a)(1) of the Exchange Act... Read More

Penalties: N/A
Respondent: Brook ChurchKoegel
Violation: "The SEC's complaint, filed in the Southern District of Florida, charges Church-Koegel, Goldman, and Walker with violating the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 and the broker-dealer registration provisions of Section 15(a)(1) of the Securities Exchange Act of 1934 and seeks disgorgement of ill-gotten gains, prejudgment interest, and civil penalties against each of them... Read More

Penalties: N/A
Respondent: Christopher Joseph Bongiorno, an individual, and Jason Allan Arthur
Violation: Defendants violated and, unless restrained and enjoined by this Court, may continue to violate Section 17(a) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. § 77q(a)], Sections 15(a)(1) and 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. §§ 78o(a)(1) and 78j(b)] and Exchange Act Rule lOb-5 [17 C.F.R. § 240.1Ob-5]... Read More

Penalties: $500,000.00
Respondent: Daniel C. Ustian
Violation: The SEC charged Ustian, of Naperville, Illinois, and Navistar in 2016 with misleading investors about Navistar's development of an advanced technology truck engine that could satisfy U.S. pollution standards. Navistar previously agreed to settle the charges... Read More

Penalties: $398,635.00
Respondent: David G. Dreslin
Violation: The SEC's complaint, filed on December 3, 2018, charged David Dreslin, CPA, and Michael Toups, who had been a registered representative, with allegedly creating a shell company. As alleged, Dreslin and Toups filed false and misleading registration statements and periodic reports with the SEC, created a phony business plan, and appointed nominee officers and directors to conceal their control over the company. The SEC also charged Toups's wife, Leslie Toups, who allegedly served as the shell's majority shareho... Read More

Penalties: $2,117,280.24
Respondent: Donald J. Fowler, et al
Violation: According to the SEC's complaint, filed January 9, 2017, and as proved at trial, Donald J. Fowler engaged in fraud when he deployed a trading scheme that was unsuitable for his customers in order to generate large commissions for himself... Read More

Penalties: N/A
Respondent: Ira S. Viener
Violation: According to the SEC's application, filed in the U.S. District Court for the Central District of California, the SEC is investigating whether Viener, Punch TV Studios, Inc., PunchFlix, Inc., or other affiliates violated the antifraud and registration provisions of the federal securities laws... Read More

Penalties: $1,223,766.00
Respondent: Neil Burkholz, et al
Violation: The SEC's complaint, filed on November 14, 2019, alleged that co-defendants Neil Burkholz and Frank Bianco used Palm Management and Shore Management to solicit investors by falsely representing that their proprietary options trading strategies were highly profitable. In reality, as alleged in the complaint, the defendants invested less than half of investor funds and those investments resulted in near-total losses. The complaint alleged that the defendants misappropriated the remaining funds by using them to repay other investors and by transferring approximately $880,000 of investor funds to Burkholz, Bianco, and their spouses for personal use... Read More

Penalties: N/A
Respondent: Todays Growth Consultant Inc. and Kenneth D. Courtright, III
Violation: The SEC's complaint, filed on December 27, 2019, alleges that, from at least 2017 through December 2019, TGC and Courtright operated a Ponzi-like scheme. In exchange for an investor's "upfront fee," TGC claimed that it would either buy or build a website for the investor, and develop, market, and maintain the website. As alleged, TGC falsely promised that it would use investors' funds exclusively for expenses related to the investor's website. In reality, as alleged, the sales were conducted through unregistered securities offerings, and TGC used new investors' funds to pay investor returns and Courtright's personal expenses... Read More

Penalties: N/A
Respondent: "Tomer Feingold and Dov Malnik"
Violation: The SEC's complaint charges Feingold and Malnik with violations of the antifraud provisions of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder... Read More

Penalties: $2,082,075.40
Respondent: Donald J. Fowler, et al
Violation: The SEC claimed that Mr. Fowler and Mr. Dean violated Section 17(a) of the Securities Act of 1933 (the “Securities Act”), 17 U.S.C. § 77q(a), and Section 10(b) of the Exchange Act of 1934 (the “Exchange Act”), 15 U.S.C. § 78j(b), and Rule 10b–5 promulgated thereunder, 17 C.F.R. § 240.10b–5... Read More

Penalties: N/A
Respondent: Michael Staisil
Violation: "According to the SEC's application, filed in U.S. District Court for the Southern District of New York, the SEC's investigation concerns an alleged Ponzi-like scheme that raised over $345 million from over 230 investors across the United States"... Read More

Penalties: N/A
Respondent: Daniel B. Vazquez, Sr.
Violation: "The Securities and Exchange Commission (“Commission”) deems it appropriate and in the
public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Daniel B. Vazquez, Sr. (“Respondent” or “Vazquez”)... Read More

Penalties: N/A
Respondent: E. Herbert Hafen
Violation: "The count of the criminal information to which Hafen pled guilty alleged, inter alia, that while employed at the Financial Institutions, he engaged in a scheme to defraud his clients by convincing them that he had access to non-Financial Institution investment opportunities that would pay an annual six percent return. Once Hafen had his clients’ money, he used it, not for any investments, but for his own personal purposes... Read More

Penalties: N/A
Respondent: Motty Mizrahi
Violation: "The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Motty Mizrahi (“Respondent”)... Read More

Penalties: N/A
Respondent: Eric D. Lyons
Violation: "The Commission’s complaint alleged that, while acting as an investment adviser to the Synchrony funds, Lyons misused and misappropriated approximately $570,000 from the funds. The complaint also alleged that, in an effort to replace some of this misappropriated money, Lyons induced an investor to invest $300,000 in one of his general partnerships through the use of false and materially misleading statements about a purported large-scale offer to invest in a Synchrony fund and a purported hundred million dollar business valuation for his advisory business... Read More

Penalties: N/A
Respondent: Attis Industries, Inc.
Violation: The Securities and Exchange Commission (“Commission”) deems it necessary and appropriate for the protection of investors that public administrative proceedings be, and hereby are, instituted pursuant to Section 12(j) of the Securities Exchange Act of 1934 (“Exchange Act”) against Attis Industries, Inc. (“Respondent”)... Read More

Penalties: N/A
Respondent: Brook Church-Koegel, David H. Goldman, and Nicole J. Walker
Violation: Defendants violated Sections 5(a) and 5(c) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77e(a) and 77e(c)]; and 15(a)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78o(a)(1)]... Read More

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